Test Pilot: Greenwald Charting Unknown Territory at United

Article excerpt

Gerald Greenwald knows the day will come when there will be a test of who is in charge at employee-owned United Airlines.

He believes he will be ready to pass that test and keep the expectations of United's new majority owners in line with the realities of the airline business.

It is a test that most observers believe will do much to determine the success of one of the boldest experiments in American industry. If shareholders approve the sale of 53 percent of United's stock to its workers, the airline will become the largest employee-owned company in the United States.

The Clinton administration has played more than a passing role in nurturing the United deal, which was described in detail to financial analysts here this week. Top officials at the Labor Department say the United brand of employee ownership could be a model, if it includes a large measure of employee participation in running the company.

It is the degree of participation, and how it is handled, that has led some skeptics of the deal to question whether employees now will believe they will be calling the shots.

"I will be tested," said Greenwald, who will become chief executive of United. Greenwald, a former Chrysler Corp. executive, is a native of University City, Mo.

"I hope to respond in the right way, keeping in mind that the first priority is the airline passenger. If I keep my bearings and do it right, I think (employee) expectations will be realistic and not overextended."

"Management must realize that there are some things that need to be done to encourage employee involvement and that there are some things that need to be done to make sure that there are smiles on people's faces when they greet passengers," Greenwald said.

It may be late June before Greenwald gets to put all of his ideas into action. The Securities and Exchange Commission must approve the details of the United deal, which takes at least 30 days, and then the company's shareholders get 30 days to look it over before they vote.

If they vote in favor, each United share will be swapped for half a share of new United stock and a mix of preferred stock, debentures and cash worth $88. However, some Wall Street analysts questioned some of those numbers, pointing out that the latest gyrations in the bond markets strained the assumptions in the deal.

While there was sharp questioning from the analysts about the effect of the deal on United's long-term future and about whether shareholders are getting full value, there also seems to be a consensus that shareholders will OK the deal. …